The approach seems to have worked so far, boosted by a red-hot economy. The state set a record last year for new job announcements, and unemployment hit a 30-year low, says Secretary of Commerce and Trade Barry DuVal. "The conclusion, of course, is that the strategy works."

Gilmore’s approach has produced casualties, though. Two of the top players in economic development are gone. Wayne Sterling, executive director of the state’s Economic Development Partnership, whose hiring five years ago helped make Virginia a serious contender in economic development, quit his post in January. And in March, 10 months after Don Upson’s appointment as technology secretary effectively replaced Robert Templin as the state’s lead spokesman for technology issues, Templin resigned as president of Virginia’s Center for Innovative Technology. He now works as a senior fellow for the nonprofit Marino Institute.

Losing Sterling and Templin hasn’t produced much fretting among economic development leaders around the state, though. It’s hard to worry about who is at the controls when things are going so well.

"The results speak for themselves," says Jim Dunn, president of the Greater Richmond Chamber of Commerce. "Last year was the best year we’ve had. The beat continues."

*  *  *

Wayne Sterling doesn’t want to talk about why he left Virginia. He had a spokeswoman say so. "Wayne Sterling doesn’t work for Virginia anymore, and he gracefully declines the interview," says Helen Munnerlyn of the South Carolina Department of Commerce, where Sterling is now chief of staff.

He certainly left in a hurry. Sterling announced his resignation on a Wednesday in January and was gone two days later. Over the next three months, four employees followed him to jobs in South Carolina — a project manager, the director of research, and the director of business development finance, all of whom had come to Virginia with Sterling. A member of his support staff also followed him to South Carolina.

Sterling had come to Virginia from South Carolina in 1994 to be director of the state’s Department of Economic Development under Gov. George Allen. He was described then as a fiercely competitive country boy with a national reputation for winning the big deals. And he seemed to know everybody — he had held similar jobs in Texas, Louisiana and South Carolina. "Wayne came with one of the most impressive Rolodexes that an economic development director could ever have," says Robert Skunda, who was secretary of commerce and trade under Allen.

Sterling pumped fresh blood into the state’s anemic business-recruitment effort. In his first two years, the department grew from 30 employees to 167, and capital investment in the state soared from $1.9 billion in 1994 to $5.93 billion in 1995. Everything seemed to be going well. After his promotion to head the partnership — his compensation jumped from $117,000 to a base salary of $182,000 — Sterling talked like he’d found a new home. "I would like very much to stay in Virginia for a long time," Sterling said then. "I think I’m going to love it here."

So what happened? DuVal says the partnership was renegotiating Sterling’s contract at the time he left. "We were actually providing him with an opportunity to stay," he says. He described Sterling’s departure, however, as "very amicable."

Skunda thinks Sterling left because he simply got a better offer. But Sterling actually took a pay cut: His salary in South Carolina is $130,000, and he earns an additional $30,000 as an adjunct professor at Columbia College.

Some in economic development circles believe Sterling was unhappy with Gilmore and DuVal’s increased focus on business expansion over recruitment, which was Sterling’s biggest strength. Plus, some say, Sterling didn’t have the same access to Gilmore that he’d had with Allen. There is also talk that Sterling bristled at the oversight from others in state government that comes with spending public dollars, and that along with his competitive nature came a sizable ego.

"I think people at Wayne’s level of expertise are very high maintenance. They need to be stroked by government leaders," says Jerry Brown, executive director of the Mount Rogers Partnership in Southwest Virginia. Brown was president of the Charleston Chamber of Commerce when Sterling was director of the South Carolina Development Board. The two have known each other more than a decade. "I don’t believe that Wayne felt that same kind of relationship with Gov. Gilmore that he had with Gov. Allen." Under Allen, Sterling "was used to dealing with the governor on a first name basis day to day — pick up the phone and call him if you need him, get him into a meeting, that sort of thing," Brown says. "It was perceived by those of us out in the field that that process became more difficult as Gilmore was searching for how he was going to handle economic development."

DuVal says it this way: There wasn’t less attention to recruitment, just more on expansion. "Gov. Gilmore and I agreed that we needed to focus on both bringing new business and industry to Virginia [and] a renewed focus on expanding existing businesses."

Virginia Power’s manager of economic development, Bill Stafford, has known Sterling since the early 1980s and was sorry to see him leave. Still, he says Sterling was more suited to building up an organization than to running it. "Each of us has our strengths and weaknesses. I think Wayne was a change agent, and I think that’s where his motivation and where his interests were."

In a move that was lauded around the state, the partnership’s 15-member board replaced Sterling with Mark Kilduff, a 32-year veteran of state economic development efforts. Kilduff had been acting director after Sterling’s exit and was made permanent director in April at an annual salary of $170,000. He says the partnership needs to improve its cooperation with localities, especially in rural areas. And he wants a stronger effort to promote exports of Virginia-made goods and services.

"Wayne left for reasons that are best known to Wayne," says Bob Stolle, executive director of the Greater Richmond Technology Council. Part of it was probably a desire to return to South Carolina, and part from the change in governors, he says. But the partnership is not severely weakened.

"Economic development is not one person," Stolle says. "Wayne Sterling was not the reason that those companies chose to come to Virginia. [He] was a good salesman, he helped put together the partnership. ... But that agency has not been crippled because Wayne has gone."

*  *  *

Robert Templin is on what he calls "an optimistic journey." In his new position at the Marino Institute, he’s studying ways to bring the power of the Internet to disadvantaged youth. "We can literally begin to approach some old problems in a brand new way," he says.

The work fits Templin’s background. He served as dean at two community colleges, taught at the University of Virginia and was president of Thomas Nelson Community College in Hampton. He left education when he became president of the Center for Innovative Technology in 1994, just two months before George Allen took office. The General Assembly created the center in 1984 to help businesses access the state’s technology resources, particularly those at Virginia’s colleges and universities. Allen and Skunda wanted CIT to play a bigger role in economic development, and under Templin’s leadership, it did.

But in announcing his resignation in March, Templin said it was apparent to him and the CIT board "that there needs to be a technology-oriented leadership here, now that technology agendas have become more clear." Today, he won’t talk about his departure. "When I was at CIT, I was looking at the business side of the equation," he says. "Now I’m concentrating more on the human side."

To many, Templin’s exit was a product, not of his performance, but of Gilmore’s decision to create a secretariat of technology. "Bob clearly ... was probably the most vocal proponent of the technology industry, but the world changed" when Upson was appointed, says Todd Stottlemyer, a senior vice president at BTG Inc. of Fairfax County and a member of Gilmore’s commission on information technology. "The reality is there’s a secretary, and the secretary is going to lead the state."

Michael Daniels, a vice president with the McLean office of Science Applications International Corp. and a commission member, says Templin’s departure "was perceived with probably mixed emotions. There were a number of people who [thought] it was a shame for him to move," he says. Many others, though, thought putting technology at the cabinet level "was a great strategic move," he says.

Upson’s industry-insider background — he’s a former Litton PRC executive — gives Gilmore’s technology strategy credibility. "We were successful early on in the mid-1990s with a lot of hardware — Motorola, Toshiba — and we rode that horse and we still do. I think [Gilmore] builds upon that but continues to expand the technology" community, says Greg Wingfield, president of the Greater Richmond Partnership. "And I think that’s where the Upson car comes in. What Upson gives you is a broader array of technology attributes."

No one, however, questions Templin’s contributions to CIT. "Bob Templin turned that agency from being really a black hole for state money into a productive economic development tool," Stolle says. Still, making the state’s "technology visionary" a cabinet secretary "means the role of technology in Virginia has stepped up to the next level," he says. "Technology companies are receiving much higher visibility than they ever have. The president of CIT can’t do that."

*  *  *

One of the big thrusts behind creating the Economic Development Partnership in 1996 was to take the politics out of the corporate recruiting process.

The concept was that an independent board of business leaders overseeing the partnership would lend a private-sector approach and continuity as governors came and went. Edward Bersoff, CEO of BTG, was chairman of the partnership when Sterling was named director. Everyone then talked up the value of this new approach, but Bersoff says you can’t cut all the strings.

"As long as the agencies are funded by the state, the governor’s imprint will be felt, period. And we knew that," he says. "I think it would have been a little naive to assume there was total independence from the political side."

Besides, Bersoff says, the board decides who runs the partnership. "And the board is made up of people of sufficient stature in the community where the governor isn’t going to whipsaw those people around."

May 1994
Wayne Sterling chosen from more than 400 applicants to be director of Virginia’s Economic Development Department.

September 1994
Robert Templin takes office as the sixth president of the 10-year-old Center for Innovative Technology.

July 1996
General Assembly creates independent Virginia Economic Development Partnership. Some say it’s to "take politics out of economic development." Sterling is named its first executive director.

January 1998
Jim Gilmore sworn in as governor.

May 1998
Gilmore appoints Litton PRC Vice President Donald W. Upson as Virginia’s first secretary of technology.

January 1999
Sterling, praised for being "focused, intense and competitive" in his approach to economic development, announces his plans to resign and return to South Carolina. Mark Kilduff, the partnership’s deputy director, named acting director.

March 1999
Templin, widely credited with saving the Center for Innovative Techno-logy, announces his plans to step down. Wolfgang Tolle, the center’s managing director for technology industry development, is named acting director.

April 1999
Virginia Economic Development Partnership board names Kilduff executive director. He outlines plans for greater cooperation with regional development organizations and more focus on exports.